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Brazil's Congress this week passed a bill that would regulate the use of cryptocurrency as a means of payment throughout the country, potentially providing a boost toward the adoption of digital assets in the South American nation. The bill, which still requires the signature of the president, would give legal status to payments made in cryptocurrencies for goods and services—but would not grant them the status of legal tender.
One of the most important aspects of the regulation is the obligation for service providers to separate their funds from those of their clients as a way to prevent a situation similar to that of FTX. The Bahamas-based crypto exchange founded by Sam Bankman-Fried collapsed earlier this month after a bank run on the exchange, and the resulting liquidity crisis, revealed that the company did not hold one-to-one reserves of customer assets, and instead used them to fund its own financial operations.
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